There is enormous volatility in markets over the next 60 days: Saurabh Mukherjea, Ambit Capital

In a chat with ET Now, Saurabh Mukherjea, Head of Equities, Ambit Capital shares his views about the market outlook.

ET Now: A lot of key triggers are lined up, you have got the RBI meet in January, you have the UP elections as well and the budget. What would be the key event that the market would take cues from and could perhaps change the market direction?

Saurabh Mukherjea: 12th and 13th January are the key dates because that’s where the Spanish and Italian bond auctions kick off. I am deliberately focussing on Europe because I do believe in the first 60 days of the year, what happens in Europe will have a huge impact on global markets. So 12th and 13th January is when the Spanish and Italian bond auctions for this quarter begin. Between the two countries, they are raising nearly $250 billion in bond auctions and that journey kicks off on 12th.

Then around 20th January is when European banks have to finalise their recapitalisation plans, so that’s another key date. Now within India, obviously earnings season kicks off from 15th January and the budget from what we understand will be sometime around mid-March or 15th March. So the journey from 15th January to 15th March has numerous key dates both from European perspective and bond issuance, bank recap plans and in terms of our earnings and then ultimately our budget.

Now the state elections will play a role because how the ruling coalition does in the elections will be key in the markets’ estimation of how long the coalition will last. If the ruling coalition does well in the state elections, the market will take that as a relatively positive signal. So, the five state elections over the course of January-February will play a critical role. There is enormous volatility here in the next 60 days. I do not think it will be a directional market trending up to 18000 or on the other hand trending all the way down to 14000. There is enormous volatility because there are massive triggers pretty much every third, fourth day over the next 60 days.